When German companies complain about increasingly fierce competition from China, they are quick to bring up concepts such as “state subsidies,” “dumping prices,” and “unfair competition.” However, Roland Busch, CEO of Siemens, believed this explanation is overly simplistic. He cautioned against attributing China’s success solely to state support and cited a reason that has Germans uneasy.
“The truth is rather that we are dealing with very capable competitors in China—with skilled engineers and dedicated teams who develop innovative products and quickly adopt new technologies, including AI,” said Busch. “This is the new competitive landscape. We must acknowledge it and respond accordingly.”
In other words, the reason China‘s exports of industrial goods have been increasing is largely that its Chinese competitors have become more competitive in many sectors.
Therefore, Busche does not support the approach of imposing tariffs to comprehensively protect the European market. He said that while taking specific, targeted measures may be justified, Europe must be “extremely careful” when using trade barriers to protect areas where it lacks competitiveness, “because that will backfire.”
Busch elaborated on his viewpoint when discussing artificial intelligence. He believes that while Chinese companies are rapidly adopting new technologies, Europe is bogged down in lengthy regulatory procedures.
Busch noted that it could take the EU two years to approve an AI or data bill, during which time AI models might have “been upgraded six to eight times”; by the time the EU’s regulations take effect, the technology may have already evolved in a different direction. He concluded: “We’re always playing catch-up.”
